Meiji Holdings Co., Ltd. · TSE:2269

Meiji — H1 FYE March 2017 Earnings Presentation

29 slides from Meiji's earnings presentation, Nov 14, 2016

  1. Slide 1: Financial Results for the First Half of FYE March 2017

    Financial Results - For the First Half of FYE March 2017 - November 14, 2016

  2. Slide 2: Contents

    Contents 1. Overview for the First Half 2. Outlook for the Second Half and Full-year 3. Progress in STEP UP 17 Strategy: Our strategic efforts to address issues  Business forecasts and other forward-looking statements are based on information available at the time of the release of this presentatio

  3. Slide 3: Basic Policies

    Basic Policies Accelerate growth and improve profitability 1. Strengthen priority businesses and take on the challenge of future growth 2. Improve profitability to withstand harsh economic environment 3. Pursue global expansion 4. Evolve the management system 3 ｜ Nov. 14, 2016 ｜ Copyright © 2016 Mei

  4. Slide 4: H1 Summary

    H1 Summary - FYE March 2017 (JPY bn) Initial plan Results Change vs. Plan YoY Change +0.1% +2.4% Net sales 606.0 606.7 +0.7 +14.4 +14.8% +11.7% Operating income 32.5 37.3 Meiji HD +4.8 +3.9 Op. income margin 5.4% 6.2％ +0.8pt +0.5pt Net income attributable to +3.5% -26.6% shareholders of parent 23.5

  5. Slide 5: H1 Operating Income: Increase in Food and Decrease in Pharmaceutical

    H1 Operating Income: Increase in Food Segment and Decrease in Pharmaceutical Segment (JPY bn) YoY Change in Operating Income • Increased retirement benefit costs H1 Results -- • Income decline due to SKU reduction FYE March 2016 28.7 -1.7 : Negative impact of special factors : Decrease in raw materi

  6. Slide 6: H1 Overview

    H1 Overview - FYE March 2017  Sales of core products, highly value added products, Food continue to grow  Promote further structural reform  Negative impact of NHI drug price revisions and a Pharma one-time payment for Bilanoa  Focus our promotional activities on newly launched products  Increa

  7. Slide 7: Outlook for the Second Half and Full-year

    2. Outlook for the Second Half and Full-year 7 ｜ Nov. 14, 2016 ｜ Copyright © 2016 Meiji Holdings Co., Ltd. All rights reserved.

  8. Slide 8: Plan

    Plan - FYE March 2017 (JPY bn) First Half Second Half Full Year Results YoY Change Plan YoY Change Plan YoY Change +2.4% +2.0% +2.2% Net sales 606.7 +14.4 644.2 +12.7 1,251.0 +27.2 Meiji Holdings +11.7% -0.4% +4.8% Operating income 37.3 +3.9 44.1 -0.1 81.5 +3.7 +1.4% -5.0% -2.2% Op. income margin 36

  9. Slide 9: Plan: Capex, Cash Flow and Dividends

    Plan - FYE March 2017 (JPY bn) H1 Results Full-year Plan YoY Change YoY Change -3.4% +33.6% Capital expenditures 23.3 -0.8 56.6 +14.2 +12.2% +7.6% Depreciation and amortization 22.1 +2.4 45.2 +3.1 Meiji Holdings -2.8% -2.6% R&D expenses 12.5 -0.3 26.5 -0.7 -91.6% -78.0% Free cash flows 3.9 -42.5 21.

  10. Slide 10: Progress in STEP UP 17 Strategy

    3. Progress in STEP UP 17 strategy: Our strategic efforts to address issues 10 ｜ Nov. 14, 2016 ｜ Copyright © 2016 Meiji Holdings Co., Ltd. All rights reserved.

  11. Slide 11: Food: Functional and Plain Yogurt

    Food Increase in Sales and Market Share of Core Products Enhancing Added Values Meiji’s Sales (JPY bn) (JPY bn) Yogurt Market in Japan (amounts) Meiji’s Share 43.1% Functional and plain (+0.1pt, yoy) 189.9 198.5 +2% 400 386.3 yogurt H2 99.6 348.1 348.4 300 H1 200 98.8 16.3 17.3 100 14.3 15.3 16.3 17

  12. Slide 12: Food: Chocolate

    Food Increase in Sales and Market Share of Core Products Enhancing Added Values Meiji’s Sales (JPY bn) (JPY bn) Chocolate Market in Japan (amounts) Meiji’s Share 23.9% (+0.1pt, yoy) 95.6 99.4 400 +3% Chocolate 351.0 363.6 H2 346.4 300 58.8 200 H1 40.6 16.3 17.3 100 14.3 15.3 16.3 17.3E Grow business

  13. Slide 13: Structural Reform in Processed Food Business

    Food Structural Reform in Processed Food business: Selection and Concentration Resulted in Improved Profitability Meiji’s Sales (JPY bn) Increase sales of cheese especially natural cheese 35.6 34.8  Cheese market is expanding Cheese H2 18.3  Focus marketing activities on Meiji Hokkaido H1 17.3 Tok

  14. Slide 14: Establish Effective Logistics System to Decrease Logistics Costs

    Food Establish Effective Logistics System to Decrease Logistics Costs Concerns for increase in logistics costs due to shortage of truck drivers and increase in our sales volume  Improve total logistics efficiency including review of delivery routes  Invest to establish optimized warehouses allocat

  15. Slide 15: Increase Profitability by Expanding Sales in Overseas Business

    Food Increase Profitability by Expanding Sales in Overseas Business  Growing sales in local currency in China and the Meiji’s Overseas Sales for Food Business USA, our areas of focus (JPY bn) ■Affiliates accounted for by equity method and non-consolidated companies Grow sales with profit increase D

  16. Slide 16: Pharma: Establish Market Presence for Newly Launched Products

    Pharma Establish Market Presence for Newly Launched Products and Boost Sales of Existing Products in Domestic Business Meiji’s Sales for Ethical Pharmaceuticals Establish market presence for newly launched products business in Japan  Sycrest sublingual, Antipsychotic drug (JPY bn) NHI Drug Price Re

  17. Slide 17: Pharma: Overseas Business Expansion

    Pharma Execute expansion strategy and contribute to profit in Overseas Business Meiji’s Overseas Sales for Pharmaceutical Business Boost sales in overseas market (JPY bn) 41.9 43.1  Expand sales of key products such as Meiact in China, India, and ASEAN regions H2 24.1  Promote closer cooperation a

  18. Slide 18: Focus on Our Expertise to Develop New Drugs

    Pharma Focus on Our Expertise to Develop New Drugs R&D Pipeline (◆: compounds discovered in-house) FYE March 2017 FYE March 2018 ME1111 [Antionychomycosis] ◆ (P I/II finished, pending) Infectious diseases ME1100 Arbekacin inhalation [HABP/VABP] ◆ Phase I (Overseas) OP0595 [β-lactamase inhibitor] ◆ O

  19. Slide 19: ｜ Nov. 14, 2016 ｜ Copyright © 2016 Meiji Holdings Co., Ltd. All rights

    19 ｜ Nov. 14, 2016 ｜ Copyright © 2016 Meiji Holdings Co., Ltd. All rights reserved.

  20. Slide 20: Appendix

    Appendix 20 ｜ Nov. 14, 2016 ｜ Copyright © 2016 Meiji Holdings Co., Ltd. All rights reserved.

  21. Slide 21: Financial Position as of September 2016

    Financial Position as of September 2016 (JPY bn) (As of March 2016) (As of September 2016) Total Assets: 856.1 Total Assets: 837.1 Results (Change) Results (Change) Notes and 276.6 Cash and accounts 104.0 (+0.0) 362.9 22.1 (-9.7) payable deposits Current Current Notes and Liabilities Short-term acco

  22. Slide 22: H1 Results: Quarterly Operating Profit

    H1 Results - FYE March 2017: Quarterly Operating Profit (JPY bn) Q1 Q2 H1 (Q1-Q2) FYE March 2017 Net sales 301.0 305.7 606.7 Operating income 22.0 15.2 37.3 Op. income margin 7.3% 5.0% 6.2% Meiji Holdings FYE March 2016 Net sales 293.1 299.1 592.3 Operating income 16.8 16.5 33.4 Op. income margin 5.

  23. Slide 23: H1 Results: Analysis of Consolidated Operating Income

    H1 Results - FYE March 2017: Analysis of Consolidated Operating Income (JPY bn) (By Segment) First Half Food Pharma Other H1 Results -- FYE March 2016 33.4 28.7 4.9 -0.2 Due to increased/decreased sales +7.5 +6.1 +1.4 ― Impact of drug price revision -4.2 ― -4.2 ― Changes in costs of goods sold +3.5

  24. Slide 24: Plan by Business in Food Segment

    FYE March 2017 Plan by Business in Food Segment (JPY bn) H1 H2 Full-year Results YoY Change Plan YoY Change Plan YoY Change Fermented Dairy +8.5% -3.7% +2.3% Net sales 269.7 +21.1 253.4 -9.6 523.2 +11.5 Fresh and Operating +35.7% -14.3% +6.8% income 24.0 +6.3 20.7 -3.4 44.7 +2.8 -4.0% -6.5% -5.2% 94

  25. Slide 25: Plan by Business in Food Segment: Other and Corporate

    FYE March 2017 Plan by Business in Food Segment (JPY bn) H1 H2 Full-year Results YoY Change Plan YoY Change Plan YoY Change +4.2% +2.5% +3.3% Net sales 178.4 +7.1 182.4 +4.3 360.9 +11.4 Other Operating +117.1% +2.9% +45.0% income 2.5 +1.4 2.1 +0.0 4.6 +1.4 ― ― ― and Corporate Net sales -125.8 -5.0 -

  26. Slide 26: Full-year Plan: Analysis of Consolidated Operating Income

    Full-year Plan - FYE March 2017 : Analysis of Consolidated Operating Income (JPY bn) (By Segment) Full-year Food Pharma Other Results -- FYE March 2016 77.7 68.2 10.1 -0.6 Due to increased/decreased sales +14.1 +4.6 +9.5 ― Impact of drug price revision -9.2 ― -9.2 ― Changes in costs of goods +3.0 +3

  27. Slide 27: New Packaging of Meiji Oishii Gyunyu (900 mL)

    Product Topics Food New Packaging of Meiji Oishii Gyunyu Previous Increase in market size and sales of Meiji Oishii Gyunyu container New container in sales amount from FYE March 2013 115 (1000mL) ( 900mL ) H1 Results 110 YoY Change +0.6% 105 Meiji Oishii Gyunyu 100 Drinking milk market in Japan -2.1

  28. Slide 28: Newly Launched Products: Sycrest

    Product Topics Pharma Newly launched products in FYE March 2017 1. Sycrest, Antipsychotic drug Rapid onset and one of the promising choices for the treatment of acute schizophrenia, launched in May Market • Market size of Schizophrenia: 190 billion yen • Competing drugs are penetrated by generic pro

  29. Slide 29: Newly Launched Products: Ultibro and Bilanoa

    Product Topics Pharma Newly launched products in FYE March 2017 2. Ultibro, COPD drugs Inherit commercialization rights in Japan in July Market / Product feature • Market size of COPD: 33 billion yen • Rapid onset and long acting • Estimated peak sales: 18 billion yen, when drug price was first calc

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